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Experts: Google needs Detroit to fuel self-driving car biz

The Roush-assembled Google prototypes are small, pod-shaped cars that appear to be the size of a Smart ForTwo with two seats and two doors.

Google Inc. is positioning to become a player in the automotive industry with advanced autonomous technologies. But with all the expertise in Silicon Valley, it can’t be accomplished without the Motor City.

Experts and officials say it’s no surprise Google shipped the project from the West Coast to Southeast Michigan — this region has expertise.

“(It) makes a lot of sense given the state’s clear leadership in vehicle manufacturing and engineering,” said Richard Wallace, director of transportation systems analysis at the Ann Arbor-based Center for Automotive Research. “It also should help motivate Michigan companies to continue innovating and developing great new vehicle technology.”

Last week, the Mountain View, Calif.-based tech giant announced it would launch a fleet of 100 self-driving vehicle prototypes, sans steering wheel and gas and brake pedals, by the end of the summer.

Livonia-based Roush Enterprises Inc. will assemble the prototypes with parts from several Southeast Michigan suppliers, anonymous sources confirmed to Crain’s. It remains unclear whether the prototypes will be retrofitted at Roush’s locations in Allen Park or Livonia.

Google and Roush declined to comment on the topic.

Troy-based Delphi Automotive plc, which supplies connectivity technology, confirmed it is involved in the process, but would not comment on details.

Other autonomous vehicle technology suppliers, such as Auburn Hills-based Continental Automotive Systems LLC and Van Buren Township-based Visteon Corp., declined to verify whether they are involved in the project.

While suppliers are eager to work with Google, the Detroit 3 see the software firm as a competitive threat.

“Anybody can do anything with enough time and money,” Mark Reuss, General Motors Co. product development chief, told reporters last week. “If they set their mind to it, I have no doubt” that they could become “a very serious competitive threat,” he said.

But for the state of Michigan, and metro Detroit, Google’s decision validates the effort put into the industry, said Nigel Francis, senior vice president of the automotive office for the Michigan Economic Development Corp.

“What you’ve got in California is really smart people developing software for consumer products; in Michigan, we’re developing software for critical systems on the vehicle,” Francis told Crain’s prior to Google’s announcement last week. “For as masterfully as California can put together a smartphone, Michigan puts together a much more complex, more regulated product called the automobile.”

Francis said the state should see more and more work coming from California as software integration into vehicles continues.

“As California and other places get more and more interested in integrating into the car, they’ll have to come where integration happens, and that’s Michigan,” Francis said. “We have to keep on our poker face, and these companies will come here sooner than you think.”

Julie Fream, president and CEO of the Troy-based Original Equipment Suppliers Association, said Google pairing with Detroit suppliers provides validation for both parties.

“The technology demands are different … and this is a great recognition that they need technical expertise to get their products into vehicles,” she said. “There’s also some marketing going on here, because if this is done in the traditional automotive space, there is some recognition and credibility that goes along with that.”

Google has been developing self-driving vehicle technology since 2009, using a fleet of test vehicles equipped with sensors, lasers, radar and computers that process mapping and drive software to allow their vehicles to be driven autonomously. Google says its original test fleet has racked up some 700,000 miles of autonomous driving.

The Roush-assembled Google prototypes are small, pod-shaped cars that appear to be the size of a Smart ForTwo with two seats and two doors. It remains unclear where Google will source the vehicles.

The cars will be powered by an electric motor and have a top speed limited to 25 mph.

In an announcement posted to the company’s blog last Tuesday, Google said it will begin testing the prototypes this summer. Early versions will include manual vehicle controls and will be tested by company “safety drivers,” Google said.

A small pilot program in California may follow “in the next couple of years” if steady progress is made on the project, Chris Urmson, director of Google’s self-driving car project, wrote in the blog post.

The prototypes, which have safety items such as additional foam at the bumper and a plastic-like windshield, are part of the company’s research laboratory called Google X, which is led by Google co-founder Sergey Brin.

“We took a look from the ground up as to what it would be like if we had self-driving cars in the world,” Brin said.

“We’ve worked with partners in the Detroit area, Germany and California,” he said without giving specifics. The prototypes let users ask for a destination address and then drive them to it, Brin said.

Over the next two decades, self-driving cars are going to gain a bigger share of the market. Such vehicles will reach 11.8 million in 2035, according to Egil Juliussen, an analyst at IHS Automotive. And by 2050, he expects almost all cars to be self-driving. They are estimated to fetch premiums that will start at $7,000 to $10,000 in 2025, Juliussen said.